The crypto-community has been in a buoyant temper over the previous few days owing to a current determination taken by the United States’ Office of the Comptroller of Currency. The determination, encapsulated in an interpretive letter the OCC despatched to an unnamed financial institution, said that nationally chartered banks and financial savings establishments could now provide crypto-custody providers to their purchasers. This can also be a decision that opens the door to those establishments providing staking and crypto-lending providers sooner or later.
As one would count on, the information was reciprocated fortunately by the crypto-market, with the resurgence led by none apart from Bitcoin, the world’s largest cryptocurrency. In truth, Bitcoin was fast to breach its fast resistance and on the time of writing, was properly above $9,600 on the charts.
Ripple and the XRP group weren’t far behind when it got here to celebrating the event. But, ought to they actually? More importantly, are their reactions consultant of these voiced by the remainder of the group? The technique to go about answering this query lies maybe in figuring out what the OCC’s determination truly means.
A fork within the street behind
Sure, the choice implies that banks can provide crypto-custody providers and should provide staking and lending providers within the long-term, however at its most simple and most primitive, the event in query is a validation of Bitcoin, and by extension, the cryptocurrency market’s credentials.
Validation of Bitcoin. A cryptocurrency that was conceived again in 2009 with the intent to switch the present monetary and banking infrastructure. A cryptocurrency whose proponents have vocally and repeatedly propounded the thought of “Be your own bank.” The incontrovertible fact that such a cryptocurrency has been given the thumbs-up so publicly is as vital as something this yr.
However, “replacing the existing financial infrastructure,” “Be your own bank,” is that what Ripple has been saying all these years? Well, no. In truth, Ripple’s technique has been extra conciliatory. Instead of changing the prevailing monetary infrastructure, Ripple has leaned in direction of utilizing the technical benefits afforded by blockchain and crypto to reform the system. Do you marvel why Ripple has been comfortable to work with monetary establishments akin to banks? Well, that is the explanation.
Ergo, it’s no shock that many count on Ripple, and by extension XRP, to be the most important winners of the announcement. Now, Ripple and XRP can lastly be the solution to a $1 trillion downside, some say. No marvel the group has been fast to welcome and have a good time the OCC’s determination. That, and the truth that Brad Garlinghouse’s crypto-custody prediction from a couple of years in the past appears to have come true.
But, give it some thought – Does Ripple celebrating the announcement of crypto-custody providers ring hole? Well, it’d, as a result of as identified beforehand, its journey hasn’t been the identical as the remainder of the crypto-community. In the eyes of many, Ripple is a compromise endeavor, an enterprise that’s keener on paling round with monetary establishments than truly selling the thought of cryptocurrencies.
Hiccups within the street forward
That’s not all, nonetheless. For years, Ripple has been stricken by allegations which have advised that the XRP ecosystem is approach too centralized, regardless of execs like David Schwartz claiming that the XRP ledger is extra decentralized than Bitcoin and Ethereum. In truth, a BitMEX analysis report published a couple of years in the past had claimed,
“…. Ripple system appears for all practical purposes to be centralized and is therefore perhaps devoid of any interesting technical characteristics, such as censorship resistance, which coins like Bitcoin may have.”
Now, whether or not there may be any reality to those allegations isn’t the main focus of this text. What is obvious, nonetheless, is the truth that issues pertaining to centralization persist. And they’ve continued for some time. And that’s unbecoming for any cryptocurrency ecosystem.
Finally, there’s the matter of what XRP is. As of now, XRP’s standing continues to be being litigated upon within the United States. The reply to “What is XRP?” continues to be up within the air. In such circumstances, is it maybe too untimely to have a good time an announcement which may not even come to play? Think about it – What if XRP is dominated to be a safety? Well, you’ll be able to overlook about nationwide banks providing custody providers for XRP then.
In conclusion, are Ripple and the XRP group prematurely cheering OCC’s determination? Well, for an ecosystem that supposedly revolves round a cryptocurrency, the reply is sure. But see, that’s the factor – Ripple’s trajectory over the previous few years hasn’t been the identical as the remainder of the group. Ripple and the XRP group are proper to have a good time the event, however there’s a good argument to be made in favor of it not being consultant of the remainder of the group.
Then once more, maybe anybody who has welcomed the information whereas harping on about “Be your own bank” is responsible of that.
That and the truth that the courts are nonetheless unclear on what XRP is means that maybe, these celebrations ought to have an asterisk to them.